Nikkei in 3-day Slump, Yen Nears Record High; Nintendo Plunges 12%

Nigel Thomas
29 Jul, 2011
New York City

Stocks in Japan fell for the third day in a row as the U.S. faces debt default. The irresponsible lawmakers in the House are playing reckless with the U.S. economic recovery and the endangering world economic growth. Nintendo plunged 20% on weak sales and Nisshin Steel lifted annual earnings view.

[R]4:30 PM Tokyo – Stocks in Japan declined for the third day in a row as the U.S. faces debt default and a rating downgrade. The irresponsible lawmakers in the House are playing reckless with the U.S. economic recovery and the endangering world economic growth. Nintendo plunged 20% on weak sales and Nisshin Steel lifted earnings estimate.[/R]

Stocks in Japan dropped as the prospect of the U.S. default rose and the lawmakers struggle to solve the debt talk impasse that has become a political theater and less about economic priorities. Nintendo plunged as much as 19% on worsening earnings outlook.

U.S. House Speaker John Boehner on a dramatic Thursday failed to garner enough support for his negotiated bill with President Barack Obama to cut spending by $3 trillion and raise debt limit in two steps.

The U.S. is only three days away from a debt default that could slow the incipient economic recovery and raise rates worldwide. The irresponsible lawmakers are largely concerned about their election prospects a year from now rather than the fiscal future of the U.S. and world economy.

Asian markets fell after a deadlock on the U.S. debt ceiling continued and mixed economic data.

The Nikkei 225 Stock Average decreased 0.7% to 9,833.03 and the broader Topix index fell 0.8% to 841.37. For the week the Nikkei index dropped 3%, the largest weekly decline since the week ending on March 18.

Trading volume jumped above the average of the last week to 1.95 billion shares and declining shares outnumbered the gainers by 1,266 to 304.

The yen eased to 77.48 from 77.55 against one dollar and to 111.25 from 111.05 against one euro. The yen traded at 76.25 to a dollar on March 17 and less than 5% away from a record in the last seven decades.

Stock Movers

Industrials and capital equipment makers decreased as jitters related to the U.S. debt talks dragged broader market indexes and the yen edged towards a 4-month high.

Mitusi Fudosan increased 2.1% to 1,469 after quarterly earnings increased 20% and said it may raise its full year earnings outlook.

Nintendo dropped 12% to 12,290 yen after it lowered its annual earnings outlook by 82% to 20 billion yen and cut prices of its game console to stimulate weak sales. Nintendo will also lower prices by 40% in Japan for its 3DS to 15,000.

Nisshin Steel soared 9% to 160 yen after the steelmaker estimated full year earnings to jump 100% to 21 billion yen. The company said that the production recovery among the automakers and industrial companies is expected to lift the demand.

Renesas Electronics Corp soared 3.2% to 669 yen on the speculation in the Nikkei business daily that the company plans to sell its loss making audio chip business to Murata Manufacturing Co.

Sony declined 3.3% to 1,947 yen after the electronics gadget maker lowered its annual earnings outlook by 25% and TV sales estimate.

Ulvac Inc plunged 19% to 1,429 yen after the solar cell maker said it may declare a loss this year